Correlation Between North American and Bank of New York
Can any of the company-specific risk be diversified away by investing in both North American and Bank of New York at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining North American and Bank of New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Construction and Canadian Banc Corp, you can compare the effects of market volatilities on North American and Bank of New York and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in North American with a short position of Bank of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Bank of New York.
Diversification Opportunities for North American and Bank of New York
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between North and Bank is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction and Canadian Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Banc Corp and North American is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on North American Construction are associated (or correlated) with Bank of New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Banc Corp has no effect on the direction of North American i.e., North American and Bank of New York go up and down completely randomly.
Pair Corralation between North American and Bank of New York
Assuming the 90 days trading horizon North American is expected to generate 2.27 times less return on investment than Bank of New York. In addition to that, North American is 2.33 times more volatile than Canadian Banc Corp. It trades about 0.06 of its total potential returns per unit of risk. Canadian Banc Corp is currently generating about 0.32 per unit of volatility. If you would invest 1,154 in Canadian Banc Corp on September 6, 2025 and sell it today you would earn a total of 269.00 from holding Canadian Banc Corp or generate 23.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Construction vs. Canadian Banc Corp
Performance |
| Timeline |
| North American Const |
| Canadian Banc Corp |
North American and Bank of New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Bank of New York
The main advantage of trading using opposite North American and Bank of New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Bank of New York can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bank of New York will offset losses from the drop in Bank of New York's long position.| North American vs. 2028 Investment Grade | North American vs. Micron Technology, | North American vs. DGL Investments No1 | North American vs. Theralase Technologies |
| Bank of New York vs. Bird Construction | Bank of New York vs. Getty Copper | Bank of New York vs. CubicFarm Systems Corp | Bank of New York vs. Arbor Metals Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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